Godrej Housing Finance targets ₹10,000 crore affordable loan book by 2031

BENGALURU: Godrej Housing Finance (GHF), a subsidiary of non-banking financial company Godrej Capital, plans to scale up its affordable housing finance business to ₹10,000 crore in assets under management (AUM) by 2031, betting on demand in smaller cities as affordable housing opportunities in major metros shrink.

The Mumbai-based lender launched its affordable housing finance business in 2025 and currently manages ₹600 crore in AUM, serving more than 3,000 customers. It has expanded to 52 branches across Maharashtra, Gujarat, Tamil Nadu and Rajasthan since its launch, and plans to deepen its presence in these and other emerging markets.

Its affordable housing loans typically range from ₹5 lakh to ₹1 crore, with an average ticket size of under ₹20 lakh.

GHF's overall business has crossed ₹10,000 crore in AUM and serves more than 23,000 customers. Its prime home loan segment, which caters to buyers of higher-value homes, accounts for ₹8,500 crore of this.

“With growing demand for affordable housing and our continued expansion into emerging markets, we aim to scale the affordable housing finance business to ₹10,000 crore in AUM by 2031. We are seeing reasonable development across tier 2 and tier 3 cities in terms of budget homes built by developers or through self-construction. The challenge is really in the metro cities, where there is hardly any supply of affordable housing,” managing director and chief executive Mehernosh Tata told Mint in an interview.

Godrej Housing Finance began operations in 2020-21, initially financing buyers of properties developed by Godrej Properties Ltd. It subsequently diversified its lending to include projects by other leading real estate developers across major metros, building a prime home loan portfolio catering to customers with established income profiles, strong credit histories and higher borrowing requirements.

In 2025, it entered affordable housing finance to reach a wider customer base, particularly in smaller cities and emerging housing markets. The nationwide recognition of the Godrej brand is an advantage in building this business, Tata said.

“There are a few tailwinds for affordable housing in tier 2 and tier 3 cities. A lot of new companies are opening up in these locations, generating employment. This has led to people wanting to buy homes. Due to increased nuclearization of families even in smaller cities, and aspirationally, people want to move into their own homes. All these factors would drive the kind of growth we are aiming for,” he added.

GHF has expanded its network across smaller towns in its four states. In Maharashtra, these include Pandharpur, Jalgaon, Latur and Shirdi, while in Gujarat, the lender has entered markets such as Himmatnagar, Mehsana, Botad and Vapi. Its Tamil Nadu presence includes Coimbatore, Madurai and Salem, while in Rajasthan it operates in Jaipur, Jodhpur and Bhilwara.

Growth beyond metros

The expansion comes amid a slowdown in affordable housing supply and sales in India's largest cities, even as premium and luxury housing continues to gain traction. Smaller cities, meanwhile, are emerging as important growth markets for residential real estate.

While the top eight cities will continue to anchor the sector in terms of sales volumes, tier 2 and tier 3 cities are becoming increasingly important growth drivers, according to a September report by the Confederation of Indian Industry (CII) and property advisory Knight Frank India.

Residential prices across a set of smaller cities, including Bhopal, Bhubaneswar, Chandigarh Tricity, Goa, Indore, Jaipur, Kochi, Lucknow, Nagpur, Visakhapatnam and Coimbatore, rose an average 63% between 2021 and 2026, compared with 42% across the top eight cities, the report said. Infrastructure development, better connectivity and rising consumption have supported this growth.

“Our growth will come from the substantial opportunity that tier 2 and tier 3 markets offer in affordable housing financing. Going forward, we will probably be in 8-9 states, and deepen our presence in each of them, which will lead to the increase in AUM,” Tata said.